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Small Business Loan
How to get a business loan
This section looks at some of the business loan requirements you will need to fulfil, as well as the factors that we assess when you make an application. Alternatively, you can find out instantly if you are likely to get the money your business is seeking using our Eligibility Checker. If you make an application we will seek to find out about:
You and your business – To gain a full understanding of your business, plus how your skills and experience will help achieve your plans
Personal/business investment – To establish your investment in the business compared to what our investment might be.
Purpose – To know how your planned borrowing fits in with your plans and discuss your finance options.
Amount – To determine if the amount you’re applying for is appropriate and help structure your borrowing in the most suitable way
Term – To discuss the time period over which the borrowing is required, helping us assess your finance options and your ability to repay
Repayment – To understand how you intend to repay the borrowing and be confident of your ability to do so (eg from trading profit, cashflow or asset disposal)
- For a new business this may be set out in a business plan and cash flow forecasts
- For established businesses this is usually the assessment of the historic trading figures, current turnover, as well as plans and projections
Some of the following may be required to help us assess affordability and your ability to make repayments. The more finance you’re applying for, the more information and documents we may need to see. If you’d like to know more, please ask your Business Manager for more details.
Security/assets – To seek some form of appropriate security, such as guarantees, property or other assets that are straightforward to value and realise
Other business interests – To know what other commitments you or your management team has, so we can assess how much attention and focus the business will have
Cash flow forecast and business plans – To demonstrate your ability to think logically about your business strategy and business model
Management accounts and historic accounts – To see evidence of past financial performance (not applicable to start-ups)
Business Loan Rates and Charges
The minimum loan size is 1,000 and the maximum is 25,000.
The minimum loan term is 12 months and the maximum is 10 years.
The interest rate is fixed for the term of the loan and agreed at the outset. Interest is charged throughout the full loan and any month when a repayment is not made.
A competitive arrangement fee of 100 is payable at the start of the loan.
3-month payment holiday
A 3-month repayment holiday is available at the start of the loan. If this option is taken, interest is charged throughout the 3-month period, meaning the amount of interest you pay will be higher.
Early repayment charge
Under the Consumer Credit (Early Settlement) Regulations, if the loan is repaid early the bank is entitled to deduct interest of 1 calendar month and 28 days. This is automatically included in the calculation of the rebate of interest to give the loan settlement figure.
7.4% APR representative (fixed). Based on an assumed loan amount of £13,000 over 60 months at the AIR of 7.1% p.a (fixed). Monthly repayment £256.67. Total amount payable £15,500.72.
Total amount payable
*Annual Percentage Rate Representative (APR Representative)
7.4% APR representative (fixed)
* Annual Interest Rate (AIR)
7.1 % p.a (fixed)
* Simple Interest rate
* Annual Percentage Rate (APR) is the total cost of the credit expressed as an annual percentage. It represents the actual yearly cost of credit over the loan term and includes the rate of interest and a £100 arrangement fee. The APR will vary depending on the loan amount and term.
* Annual Percentage Rate Representative (APR Representative) is the advertised rate (or a lower rate) we reasonably expect at least 51% of people who are accepted for and enter into the loan agreement as a result of the advertising or marketing will pay.
* Annual Interest Rate (AIR) is the rate of interest on a loan with the rate compounded on a monthly basis.
* Simple Interest Rate is the rate at which daily interest accrues on the loan (not compounded)
- Interest rates View the interest rates for all our lending products
- Price list See the prices of our most frequently-used account services
- Appeals for borrowing If your lending application is declined, find out how you can appeal the decision
- Terms and Conditions for Sole Traders and Partnerships
- Terms and Conditions for Limited companies
- 10billion lending fund If you’re ready to take your business to the next level, come and talk to us about our 10 billion lending fund for small businesses.